Playboy Posts 4th Quarter Results, Touts Online Growth

CHICAGO — Against a reported drop in fourth-quarter profits, Playboy Enterprises CEO Christie Hefner told investors the company had achieved a measure of success with its online and video-on-demand offerings.

Playboy’s fourth-quarter revenue came in at $86.2 million, a 5 percent drop from the same time last year when the company reported $93.1 million in revenue.

Playboy reported net income of $3.7 million, or 11 cents per share, compared with $4.6 million, or 14 cents a share, in the fourth quarter last year.

The company cited an unidentified $1.8 million legal settlement associated with the entertainment group, decreases in its domestic TV business, and a difficult publishing market as reasons for the overall drop in profitability.

“While the year clearly has been challenging for the domestic TV and magazine businesses, growth in our licensing, online, international TV and mobile initiatives support our belief that these businesses will drive the company's performance going forward,” Hefner said.

Hefner touted last year’s acquisition of ICS as a driving force in the company’s online gains, adding that marketing expertise from the company had helped Playboy leverage its own brand in new ways. Hefner also said the $12 million ICS acquisition, which brought to Playboy GFY.com and Adult.com, helped the company expand its adult offerings, specifically Club Jenna, which the company bought for $17.6 million last year.

“We’re very pleased with our online growth,” Hefner said. “But I don’t want to give the impression that we are by any means satisfied.”

While Playboy’s domestic TV business had eroded somewhat due to inroads made by rival New Frontier Media, Hefner said she believed the future for content delivery was in the subscription VOD business.

“The loss of exclusivity on satellite and the arrival of VOD has certainly changed the landscape,” she said. “We will continue our efforts in those places, but we think SVOD is the future for content delivery.”

Susquehanna Financial Group analyst Michael Kelman said domestic TV remains the company’s primary question mark. But unlike Hefner, he wasn’t so sure that the arrival of SVOD could cure the company’s financial woes.

Playboy has made SVOD deals with both Comcast and Time Warner — two of the nation’s largest cable companies. But neither company has begun offering Playboy content via SVOD.

According to Kelman, the reason for the delay in launching SVOD is that neither cable company has much marketing support allocated for Playboy’s content.

Playboy’s publishing business, which continues to weather a difficult market, according to Hefner, managed to trim its exposure, reporting a $500,000 loss for the fourth quarter of 2006, as compared to $3.1 million for the same period in 2005.

One bright spot for the company’s flagship magazine, Hefner said, was a 22 percent jump in advertising revenue.

Responding to a CNNMoney.com report that some investors had called upon Playboy to consider a private sale, Hefner said management had no such plans.

Mark Boyar, president of Boyar Asset Management, an institutional investment firm that owns 292,700 shares of Playboy according to FactSet Research, said after the company's last annual shareholder meeting in May that the company should consider a sale.

In November, CNNMoney published a list of media companies that would appeal to private equity firms. The article focused on media companies with “sluggish but steady growth prospects and healthy balance sheets.” Playboy made the list, along with the New York Times Company.

“With regards to a leveraged buyout or management buyout, the idea is certainly kicked around when the stock is hit. But it's all up to the Hefner family since they control 70 percent of the vote,” Kelman said.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

FSC Drops Florida AV Lawsuit in Wake of SCOTUS Decision

A U.S. district court judge granted on Tuesday a motion by Free Speech Coalition to dismiss the trade association’s lawsuit over Florida’s age verification law, a case that had been on hold pending the Supreme Court’s recent ruling on the constitutionality of state AV laws.

Gal Ritchie Toplines Dorcel's 'Pigalle'

2025 XMAs winner Gal Ritchie stars with Clara Mia in the latest feature from Dorcel, titled “Pigalle.”

Ukrainian President Responds to Porn Legalization Petition

President Volodymyr Zelensky responded Tuesday to an OnlyFans model’s petition to decriminalize pornography in Ukraine, stating that he would wait for the legislative process to play out “in accordance with established procedure.”

Penthouse Names Sharna Beckman July's 'Pet of the Month'

Penthouse Magazine has named Australian model Sharna Beckman as Pet of the Month for July.

Only Tax Deductions Joins Pineapple Support as Sponsor

Adult industry accounting firm Only Tax Deductions has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Adult Empire Launches 'Conversations' Podcast Series

Adult Empire has launched a new official podcast series hosted by Nicole Chappelle and Charlie.

Adult Time Names Alison Rey as Newest Brand Ambassador

Adult Time has named Alison Rey as the studio's newest brand ambassador.

Violet Myers Stars in Latest From Brazzers

Reigning XMAs Premium Social Media Creator of the Year Violet Myers stars with Mick Blue in the latest release from Brazzers, titled "Anal Exam."

Digital Playground Premieres Marvin Love's 'The Last Resort'

Digital Playground has debuted Marvin Love's new feature, "The Last Resort."

Juliana Marie Stars in Latest From New Sensations

Juliana Marie stars with Danny Mountain in the latest release from New Sensations.

Show More